News

Alibaba’s global marketplace attracts 5,400 foreign brands

February 3, 2016 09:29 AM

More than 5,400 foreign brands from 53 countries are selling goods on Tmall Global, an online marketplace Alibaba Group Holding Ltd. launched in 2014 to take advantage of China’s relaxed rules on consumer purchases from foreign websites.

Of those 5,400 brands, 4,300 have never sold in China, according to a just-released 2015 China Cross-Border Consumption Report from Tmall Global and Chinese consulting firm CBN Data. Tmall Global allows retailers and brands without a China business license to take orders from Chinese consumers and then send the products through Chinese customers.

Sales on Tmall Global increased 179% in Alibaba’s fiscal third quarter ended Dec. 31, according to Alibaba’s recent quarterly report. Alibaba did not report the value of sales on the marketplace for foreign goods.

The new report says U.S. companies are most often ranked among the top 10 in various products categories on Tmall Global, followed by brands from Japan, Germany, Australia and Korea. The fastest-growing categories on Tmall Global are children’s products, nutritional items, cosmetics and snacks.

Among the retailers selling on Tmall Global are U.S. department store chain Macy’s Inc., the U.K.’s House of Fraser and Sainsbury’s, and Metro Group of Germany. Consumers can also buy Huggies diapers from Kimberly Clark, food products from Danone of France (whose products are marketed under the name Dannon in the United States) and cosmetics from Japanese brands Kao and Shiseido.

Alibaba has worked with government agencies in 13 countries to set up “pavilions” featuring goods from those nations. For example, the U.S. Department of Agriculture has cooperated with Alibaba on a program to sell cherries from the northwestern United States on Tmall Global.

During the big Singles’ Day sales that Alibaba promotes every Nov. 11, 95 million consumers visited Tmall Global and 30 million made purchases, the report says.

Alibaba’s chief rival in China, JD.com Inc., also has created an online shopping mall for foreign brands called JD Worldwide. Among the companies to recently launch on the JD site are luxury brands Tod’s and TAG Heuer.

China in recent years has made it easier for Chinese consumers to buy goods for their personal use online from foreign companies. The government recently increased the maximum purchase allowed under these cross-border e-commerce regulations from 10,000 yuan ($1,519) to 50,000 yuan ($7,597) per transaction, according to a report on the Chinese luxury market by U.S. consulting firm Bain & Co.

JD is No. 1 Internet 2015 Retailer China 500, which ranks retailers by their online sales in China. While Alibaba’s China marketplaces account for more than three-quarters of online retail purchases in China, it’s not ranked in the China 500 because Alibaba is not the merchant of record for those sales, instead providing a platform for other merchants to sell.